Teachings of Warren Buffett

MBA Talk
Part 1
Part 2
Part 3
Part 4
Part 5
Part 6
Part 7 
Part 8
Part 9
Part 10

Key notes:

On Japan
- Not many fantastic companies

On LTCM
- "To make $ that they didn't have and didn't need, they risk what they did have and did need."
- it is foolish to risk something important for something not important, whatever the odds may be.
- Beta of a stock doesn't tell you anything about the risk of the stock.

On Life
- Don't borrow $
- Work for passion not $

On choosing companies
- Choose a business that you understand and you know how it will look like 10 years from now.
- has a moat, esp one that is widening (eg. low cost, brand)
- honest, able management

The Trillion Dollar Bet - LTCM Documentary

Part 1


Part 2


Part 3


Part 5 

Part 3 is mislabeled. It should be Part 4. The actual part 3 which shows the development of the Black Scholes Model and them getting the nobel is missing.

Quantitative Easing

With U.S printing to the tune of US$600b, and China having been printing $ all along to keep their currency low (see below on how it works), inflationary pressure will inevidently cause the stock market and property prices to keep going up. This is what had been happening. And it will continue to, as long as the money printing continues.

What will possibly burst this bubble is a rise in interest rate. Interest rate in U.S and Japan is at all time low. Although China had started to raise a bit, it is still low (refer to the chart).

As such, China's rate hike poses no big concern for the time being, but needs to be watched to see if it will go up further. Source: http://www.tradingeconomics.com/Economics/Interest-Rate.aspx?Symbol=CNY

China Printing:
- U.S buying China goods (import > exports)
- U.S thus needs to pay renminbi for China goods
- U.S thus needs to buy renminbi to make the payment
- Demand for renminbi will make it more expensive and thus exchange rate will increase
- China thus increase the supply by printing more $ to keep renminbi low.

Closer look at JP Morgan's picks

jp morgan had got separate picks:

Stock	Price	PE	PB	PCF/ PFCF	Div%	PO%	QR	DE%
olam	3.11	19.1	4.3	14.x/ ?	1.43	24.56	0.72	254.1
first resource	1.53	12.3	2.7	10.43/ 119.1	1.52	18.17	2.58	45.1
keppel  corp	10.86	13.4	2.8	10.3/ ?	3.6	48.04	0.73	41
china minzhong	1.37	7.0	1.6	8.44/ ?	0	0	16.36	0.7

Note: changed price-free-cashflow to price-cashflow as reuters do not seem to publish pfcf for most of the counters.

China Minzhong warrants a closer look.

Check out Citi's call here: http://sgretailinvestor.blogspot.com/2010/12/closer-look-at-some-of-citis-top-picks.html

Kallang Formation

What the coloured regions meant is simply that if there is a significant earthquake from say Indonesian, these regions are at higher probability of sustaining damages.

Closer look at some of Citi's top picks

Zooming into the property and commodity counters picked by Citibank in today's business times.


Data from Reuters:

Stock	Price	PE	PB	PFCF	Div	PO	QR	D-E
allgreen	1.16	11	0.76	4.34	3.45	38.2	2.7	38.6
wingtai	1.7	9.4	0.8	19.79	1.71	26.9	3.3	78.9
capital land	3.66	10.7	1.17	22.11	1.47	27.3	?	74.9
Ascendas Real Estate Investment Trust	2.11	16.7	1.32	?	5.35	98.6	?	56.8
mapletree industrial trust	0.92	14.7	1.07	?	4.88	97.8	?	78.4
indofood agri resources	2.73	23.4	4.52	?	0	0	0.8	76.7
golden agri-resources	0.74	9.4	1.23	?	0.67	5.9	1.1	15.9

legends:
PE: Price-Earnings
PB: Price to tangible book
PFCF: Price to free cashflow
Div: Dividend Yield (%)
PO: Payout Ratio (%)
QR: Quick Ratio
D-E: Debt to Equity (%)

For property counters, my preference is low Price-book, and low Debt-Equity. As such, my top pick will be allgreen. I don't see much upside for AREIT. I don't like industrial REIT as I think industrial buildings have very low differentiation ability (ie. how different can industrial buildings be?), and thus have low holding power on their tenants. This is unlike retail and office where tenants tend to retain the space as they become more successful.

For commodity, indofood looks too richly valued. Golden agri is worth looking into greater details.

Free Tools

A side post on useful free softwares.

WORD PROCESSING
Kompozer - a WYSIWYG editor to help in html editing, making posting in blogspot easier:
- http://sourceforge.net/projects/kompozer/
- http://kompozer.net/

Free Office Powerpoint Templates
http://www.templateswise.com/

OpenOffice (useful for PDF editing)

http://download.openoffice.org/

STOCKS
ChartNexus - a free stock charting tool
http://www.chartnexus.com/products/download.php

MOBILE DEVICES
Android software downloads
http://www.ipmart-forum.com/forumdisplay.php?f=739

Symbian3 software downloads
http://www.ipmart-forum.com/forumdisplay.php?f=916

MEDIA

Free media player that plays DVD and most video formats
http://mpc-hc.sourceforge.net/download-media-player-classic-hc.html

Free DLNA Client for video streaming
http://xbmc.org/

OTHERS
DoPDF - a free ware that allows you to print to a PDF document
http://www.dopdf.com/download.php

DAEMON Tools Lite - a free ware that emulates a virtual CDROM drive
http://www.daemon-tools.cc/eng/downloads

Freemind - a free mind mapping software
- http://freemind.sourceforge.net/wiki/index.php/Download

Feedemon - a free RSS readerhttp://www.feeddemon.com/

Youtube downloads online
http://savemedia.com/

READING
Magazines: http://www.magazinesdownload.com/